Knight Frank said that the capital raised by domestic players was healthy and almost doubled to $2.4 billion from $1.3 billion during the same period.

While domestic investors dominated the real estate industry until 2008, foreign players entered the limelight since 2014, it added.

US accounted for more than 40 per cent of the foreign investments, followed by Canada (18 per cent) and Singapore (17 per cent).

Mumbai attracted the biggest pie of foreign investments in 2016, accounting for at least 39 per cent of capital flow in the Indian real estate followed by rest of India which accounted for a share of 32 per cent.

Bengaluru (11 per cent) topped the chart among other metros followed by Chennai (10 per cent) and Delhi (4 per cent).

"India, among all other emerging markets has attracted the highest interest of global investors on account of a stable government and implementation of path breaking reforms such as the Goods and Services Tax (GST) that would formalize the economy," said Samantak Das, Chief Economist and National Director, Research, Knight Frank India.

He said the real estate being one of the most important investment assets has witnessed a surge in the flow of foreign investments.

With the sector undergoing a complete transformation at the back of the new real estate law and affordable housing focus and the Real Estate Investments Trusts, the domestic investors have also joined the bandwagon, Das said.